This is a prospective multi-center double-blind, placebo-controlled Phase II-III trial in which an investigational new drug, LPJ 394, will be tested for its ability to reduce the production of antibodies to double stranded DNA (anti-dsDNA) and limit flare-ups of active renal disease in patients with lupus nephritis. The subjects will receive medication for 52 weeks, after which there will be a six month period of follow-up to assess clinical lupus activity, anti-DNA levels and health status. This study is progressing to a phase III open label trial.